Overburdened: Stockton, CA

August 8, 2012

The great recession of 2008 has been slowly recovering over the last four years, but as we eke this incremental growth, the metrics for progress are tied more with macroeconomics than with micro communities that are continuing to suffer. The divide between the very rich and the poor has not been greater since before the great depression. The middle class is shrinking and the number of people below the poverty line is near 16 percent, or roughly 48 million people. That number has steadily been rising even with unemployment falling.

To add to this burden, cities have been mismanaging their budgets for years: robbing Peter to pay Paul with their pensions, spending heavily without anyway to pay for it, and wasting money, sometimes fraudulently. The recession’s shortfalls have forced many cities with these problems into bankruptcy. This adds another level of burden to an already taxed community. Services for the most needy are cut, investment is gone, and recovery is only measured by the solvency of the cities finances, not whether there is viable economic growth for its citizens.

California cities have been especially dire. Starting with Vallejo in 2010 and continuing with Stockton and most recently San Bernardino, the number of bankrupt cities is growing. Part of this is due to California being a home-rule state that gives its municipalities wide latitude. Part of it is due to Prop 13, the 1978 ballot initiative that drastically lowered property taxes and made it hard to raise them. There is no equivalent check in place for operating cost, particularly with the rising cost of labor. Many California cities have pension plans that have relied on investment gains that have since dried up.

Earlier this year I visited Stockton to see the effects the bankruptcy was having on its already fragile economy and on its citizens. Crime is up, its social services have been cut. Prostitution and gang violence have been increasing, as have its growing homeless population. Local churches have been picking up some of the slack. Offering day care for working parents and places to sleep for a handful. But it is a city so burdened by its debt, that those most in need have fallen off the radar. It may soon find its way out of bankruptcy, but will it find its way home for the people who live there?

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